Yang Ch. 24 (Industry Comes of Age) – Flashcards

*Henry George, 1879*

As the nineteenth century and the Industrial Revolution bore upon the United States, the political and moral standards of the country became increasingly less upheld in order for a new age of profits and economic growth to come about.

- by 1900, miles of railroad had grown to 192,556 miles - transcontinental railroad construction was initially risky due to possibility of profit loss in thinly populated regions (discouraged private investors as well) - in 1862, Congress began advancing money loans to two favored cross-continent companies as well as donating large tracts of land for the tracks (railroad companies began controlling the land until 1887 when *Pres. Grover Cleveland* ended the practice of withholding land) - government began receiving benefits such as long-term preferential rates for postal service and military traffic - granting land = cheap way of subsidizing a desired transportation system - had both pros and cons for villages: : frontier villages that intersected with the rails became cities : bypassed villages became *"ghost towns"*

- main argument for construction was urgency of bolstering Union after Southern secession - established in Omaha, Nebraska - for every one mile of track constructed, company granted 20 square miles of land (alternating in 640-acre sections on either side of the track), builders also received a large federal loan of $16,000 on flat prairie land to $48,000 for mountainous country on every mile built - railroad workers often came into conflict with Native Americans who felt that the companies were trespassing on the land, workers tried to find comfort in tented towns that came to be known as *"hell on wheels"*

- established in Sacramento, California - *Big Four*: four farseeing men who were the chief financial backers of the enterprise, included *Leland Stanford* and *Collis P. Huntington*, operated through two construction companies but were able to come off clean by not involving themselves in the bribery of congressmen - Sierra Nevada produced a large barrier against construction, slowed down the pace of creating more tracks - in 1869, the two tracks finally met with one another (Union and Central) at *Ogden, Utah* - transcontinental railroad connected the west to the Union and facilitated trade with Asia, incited great growth in the West

- *Northern Pacific Railroad*: Lake Superior to Puget Sound, 1883 - *The Atchison*: Topeka to Santa Fe, 1884 - *Southern Pacific*: New Orleans to San Francisco, 1884 - *Great Northern*: Duluth to Seattle, 1893 : created by *James J. Hill*, a Canadian-American known as the greatest railroad builder of all, believed that the prosperity of the railroad depended on the prosperity of the area it served, helped improve agricultural practices for farmers in the areas he built in : however, pioneer builders suffered from overoptimism and often found themselves building "useless" railroads (ended in bankruptcy)

*In 1892 James Baird Weaver (1833-1912), nominee of the Populists, wrote regarding the railroad magnates:*

- success of western lines was facilitated by welding together and expanding older eastern networks (*New York Central*) - enterprise led by *"Commodore" Cornelius Vanderbilt* - offered superior railway service at lower rates, generated a fortune of $100 million (later contributed $1 million to the founding of Vanderbilt University) - two significant developments for railroads: *steel rails* and a *standard gauge of track width* (both of which Vanderbilt used to his advantage) - additional refinements: *Westinghouse air brake*, *Pullman Palace Cars*

- united the nation through iron and steel tracks - created a domestic market for American raw materials and manufactured goods - accelerated the post-war industrialization of America - stimulated mining and agriculture in the West - pushed for a higher urbanization of the previously rural population - increased immigration - environmental effects: : tallgrass prairies replaced by large, rectangular cornfields : grazing cattle displaced the now nearly extinct buffalo : pine forests reduced to lumber for houses and fences - major rail lines began setting *"time zones"* which became divided into 4 sections within the country - generated millionaires, *"lords of the rail"*

- schemes and scandals became more refined (Jay Gould was the most adept) - "stock watering": railroad stock promoters inflated claims about a line's assets and then sold stocks far higher than it's actual value - public often suffered while the railroad titans competed with one another (threats towards citizens, bribed judges and legislatures, employed lobbyists, elected supporters reminiscent of the spoils system) - railroad managers began to enter defensive alliances to protect profits after having been pressed to make returns on investments - earliest form of combination: *"pool"*, agreement to divide business in a given area and share the profits

- depression of 1870s convinced farmers that they had to protest against being "railroaded" into bankruptcy - *Wabash Case* (see corresponding Quizlet) - *Interstate Commerce Act of 1887* prohibited rebates and pools and required railroads to publish their rates openly : forbade unfair discrimination against shippers : outlawed price differences in short hauls over long ones over the same line : set up the *Interstate Commerce Commission* to enforce the legislation - corporation lawyer *Richard Olney* believed that the new commission could be manipulated by the railroads, making it a guise of resistance (ICC was not a popular victory for opponents of corporate wealth) - ICC helped stabilize conflict within the existing business system

- following the war, the nation began to exploit bountiful natural resources throughout the country such as coal, oil, and iron - massive immigration helped contribute to the fruitfulness of industries such as steel - after the Civil War, techniques of mass production were being developed and more patents were being issued - *Alexander Graham Bell* developed the *telephone* in 1876 (helped bring women into workforce as telephone operators) - *Thomas Alva Edison*, tinkerer and worker rather than pure scientist, helped develop phonograph, the mimeograph, the dictaphone, and the moving picture : 1879, perfects the electric lightbulb

*Regarding the exploitation of immigrant labor, Ralph Waldo Emerson (1803-1882) wrote in 1860:*

- *Andrew Carnegie* integrated every phase into his steel-making operation, giving rise to *"vertical integration"* which combined every phase of manufacturing into one organization (made supplies more reliable, controlled quality, eliminated middlemen's fees) - *"horizontal integration"*: allying with competitors to monopolize a given market - *John D. Rockefeller* used *"trust"*: stockholders in various smaller oil companies assigned stock to the board of directors of Rockefeller's *Standard Oil Company* (1870), the company then consolidated and concerted operations of the previously competing companies - *J.P. Morgan* took advantage of the 1890's depression after businessmen were driven to him due to cutthroat competition, Morgan then consolidated rival enterprises and ensured his power by placing officers of his banking syndicate amongst other various boards of directors - they came to be known as *"interlocking directorates"*

- steel was a scarce commodity during the time of Lincoln, but following the revival of the *Bessemer process* (which had cold air blown on red-hot iron which caused the metal to ignite due to the carbon thus eliminating impurities) steel began to take up a new role of dominance in *"heavy industry"* - *Andrew Carnegie*, highly charismatic Scotsman who quickly rose through the ladder of success with his character, took up the steel business in Pittsburgh with high-class associates and soon controlled a fourth of the nation's Bessemer steel - by 1900, Carnegie had grown tired of his business and was decided upon selling his holdings while Morgan began delving in the manufacturing of steel pipe tubing with Carnegie threatening to invade the business - Morgan ended up buying out Carnegie for over $400 million dollars and soon (with Carnegie's holdings and others) created the *United States Steel Corporation* in 1901 while Carnegie turned to philanthropic deeds with his accumulated wealth

*Andrew Carnegie (1835-1919) wrote in 1889:*

- in 1859, the first oil well, *"Drake's Folly"*, in Pennsylvania sprung up - *kerosene* became the first major product of the new oil industry and it soon replaced whale oil due to its effectiveness (becoming America's fourth most valuable export in the 1870s) - however, after Edison's electric lightbulb, kerosene lamps soon became obsolete - in 1900, the advent of gasoline-burning internal combustion engines for automobiles revived the oil industry once more and Rockefeller soon utilized its usefulness with his Standard Oil Company

- as robber barons dominated the American economy, belief systems in social class difference began to take a turn to religion and natural law - Andrew Carnegie believed that the wealthy had to prove themselves morally responsible according to a "Gospel of Wealth" - wide-open capitalism was heavily reliant on the survival-of-the-fittest theories of *Herbert Spencer* and *William Graham Sumner* - these thinkers stressed the rigidity of natural law, claiming a belief in the natural selection of these millionaires - self-justification of wealth increased contempt for the poor, many argued against this including *Reverend Russell Conwell* whose *"Acre of Diamonds"* lecture made him rich after multiple deliveries - many monopolists also defended themselves using the clause in the Constitution that gave Congress sole jurisdiction over interstate commerce

- appealing to Congress, the masses managed to get the *Sherman Anti-Trust Act of 1890* passed : forbade combinations in restraint of trade without any distinction between "good" trusts and "bad" trusts : law was ineffective but was unexpectedly effective in curbing labor unions/combinations that were deemed to be restraining trade

- plantation system had degenerated into a system of sharecroppers and tenants - by 1880s, southern agriculture received a boost through machine-made cigarettes which made tobacco consumption higher - *James Buchanan Duke* took advantage of this by mass producing his own brand and by 1890 had absorbed his competitors into the *American Tobacco Company*, later donated to Trinity College which changed its name to Duke University - industrialists attempted to industrialize the South, one prominent speaker, *Henry W. Grady*, tirelessly worked to exhort Southerners into competing with the North - obstacles to Southern industry: : paper barrier of regional rate-setting systems imposed by the northern dominated railroad interests which attempted to prevent the development of a substantial industrial base : *"Pittsburgh plus"* pricing system which had steel lords from Pittsburgh pressure railroads into charging additional shipping rates on the Birmingham steel of the South - by 1880, northern capital began erecting cotton mills in the South (for cheap labor) away from New England, bringing a slight industrial bearing to the South

*Henry W. Grady (1851-1889), editor of the Atlanta Constitution, urged the new South to industrialize. In a Boston speech in 1889, he described the burial in Georgia of a Confederate veteran:*

- standard of living rose sharply as American workers began experiencing more benefits and comforts than any other industrial nation - urbanization rose and more cities came about as well as factories which demanded an increase to immigration for cheap labor - early Jeffersonian ideals gave way to industrialization and business - impact on women: : new inventions brought about new ways for women to get involved in economic and social opportunities : middle-class women began experiencing delayed marriages and smaller families - accentuated class division with the introduction of robber barons and an oligarchy of money - transformed the nation into a nation of wage-earners - increased pressures for foreign trade as the industrial machine kicked in

- corporations installed a new depersonalized system that removed individuality and conscience from the work place, machines grew to displace employees, and the marketing and judicial system became more beneficial to the employer thus allowing it to be used against wage earners (also included methods like the *"lockout"* and *"ironclad oaths"* or *"yellow-dog contracts"*) - after recurrent strikes, the middle-class became deaf towards the outcries of the workers

- labor unions were given a boost by the Civil War in that due to the deaths it caused it generated a premium on labor and mounting costs of living promoted unionization - *National Labor Union*: 1866, one of the largest labor unions consisting of skilled, unskilled, and farmers that lasted for 6 years, excluded Chinese and made minimal efforts to include women and blacks : agitated for the arbitration of industrial disputes and the eight-hour workday, won the latter : depression of the 1870s essentially killed the organization

- replaced the National Labor Union when it fell, started as a secret society in 1869 to forestall reprisals by employers - sought to include workers in "one big union", included skilled and unskilled, men and women, whites and underprivileged blacks (excluded "nonproducers" such as gamblers, lawyers and bankers) - led by *Terence V. Powderly*, the Knights campaigned for economic and social reform as well as safety and health : successfully won a number of strikes for the eight-hour day - however, the organization began to fell apart when it unsuccessfully staged several May Day strikes in 1886, half of which failed : *Haymarket Square* - labor disorders broke out in Chicago, police force called in to take care of the protest, however in the midst of things a dynamite bomb was thrown into the mass of people, killing/injuring many :: 8 anarchists were found and charged for conspiracy (5 sentenced to death, 3 imprisoned) :: agitation for clemency ensued and the new governor of Illinois, *John P. Altgeld*, pardoned the three survivors to the dismay and praise of the public : incident had the public associate the Knights with the anarchists, ruining the organization : inclusion of skilled and unskilled laborers worked against the Knights as the former soon gained a superior bargaining position that they did not wish to relinquish (ended up deserting and forming another labor union)

- aka "Mother" Jones, agitated for the Knights in the Illinois coalfields

- federation of exclusively skilled craft unions - formed in 1886 under *Samuel Gompers*, a Jewish cigar maker who had rose up in the labor ranks quickly - consisted of an association of self-governing national unions - Gompers aimed for a *"closed shop"* in which there was all-union labor, used the walkout and the boycott to try to achieve that goal - ultimately, while the union remained sturdy it fell short of representing the entirety of the working class